Debt Funds v/s Bank FD
Written on Monday, November 2, 2015
By Kumar Pushpraj
A pure debt fund is a mutual fund which would generally invest its corpus in assets generating fixed income. The underlying investments are generally in Central and state government bonds, treasury bills, government securities, high credit rating corporate non-convertible debentures etc. These investments are generally considered very safe as credit rating of the underlying issuing companies is very high and a chance of default is negligible. Debt mutual funds can very prominently prove to be a perfect substitute to fixed deposit schemes. Mostly large corporates already use debt funds to manage their surplus funds efficiently. But given the tax advantages, individual long term investors can invest in debt funds as an alternate to bank fixed deposits.
Let’s compare debt funds with bank fixed deposits
After analyzing the comparison we can say, debt funds are definitely a safe bet with potential of high returns.
#Mutual Funds are subject to market risk. Read all scheme documents carefully before investing.